Future Group is in advanced talks to acquire grocery retailer Foodworld Supermarkets, a deal that could give Kishore Biyani sway over a network of nearly 150 grocery, beauty and personal care stores in southern India, according to several people with knowledge of the matter.

The supermarket chain was started nearly two decades ago as a division of Spencer & Co., part of the RPG Group, but became a separate company in 1999. It is now owned by Arko Enterprises and Health & Glow Retailing through a group of investors including veteran investment banker Hemendra Kothari and Rajan Raheja.

Eyeing Sixth Acquisition

The latter owns firms such as Globus Retail, H&R Johnson and Exide Industries among others. Last fiscal, Foodworld posted sales of Rs 449 crore at a net profit of Rs 2.3 crore through 36 grocery supermarkets and 121Health & Glow beauty stores that were merged with the company two years ago.

“Both parties have met over the past five months and it could mainly be a share-swap deal with a minor cash component,” said one of the persons cited above.

Both Future Retail and Foodworld declined to comment.

If the transaction does take place, this will be Biyani’s sixth acquisition in as many years, as Future Group consolidates its position by region, especially in grocery retail. Bharti Retail and Big Apple have a significant presence in north India with more than 250 stores while Future Group gained a southern footprint with Nilgiri’s and Heritage. Late last year, it also acquired Hypercity from K Raheja to strengthen its presence in the western market.

According to Euromonitor data, Big Bazaar, Future Group’s hypermarket format, is market leader, with a 22.4% share of the organised store-based retail market in 2016.

“By controlling a wider network of stores, Biyani will try to push his own brands within the FMCG (fastmoving consumer goods) space better, a strategy that will help him achieve his stated goal of being a consumer products company instead of just a retailer,” said Harminder Sahni, founder of retail consultancy firm Wazir Advisors.

Future Consumer has more than three dozen brands in 70 categories, including food brands such as Sunkist, Karmiq, Golden Harvest, Fresh & Pure, Premium Harvest and Tasty Treat. Biyani had earlier said he expects the firm to contribute 70% to Future Group’s consumergoods sales by 2022.

As part of a strategy to more than treble its revenue to Rs 75,000-1lakh crore by 2021, Future Group has been aggressively adding stores, though mainly in the smaller or convenience store formats. Future Retail now has a total retail space of 13.6 million sq ft with presence in 253 cities through 930 stores.

While the retailer has not been aggressively expanding larger-format Big Bazaar, it plans to double the Easy Day store count to 1,000 within the next 18 months, while its longterm plan is to have 4,000 stores by 2022. This, analysts feel, will target the daily and weekly requirements of consumers, while the hypermarket format of Big Bazaar caters to the monthly consumption basket of urban India.